No Jeopardy for State Taxpayers

No Jeopardy for State Taxpayers who Participate in the IRS'
Offshore Voluntary Compliance Initiative, says FTB.

California
taxpayers participating in the IRS' Voluntary Compliance Initiative for Offshore
Tax Shelters are encouraged to amend their state income tax returns and pay all
tax, penalties, and interest by October 15 to avoid state prosecution, according
to the Franchise Tax Board (FTB).

The IRS program targets
taxpayers that used offshore payment cards or other offshore financial arrangements
to underreport their income and tax liability. The IRS is offering these people
the chance to surrender information and avoid federal civil fraud penalties and
criminal prosecution by correcting their tax returns and providing information.

“California will grant special consideration to taxpayers
who participate in the IRS program and make amends with the state,” said
State Controller and Franchise Tax Board Chair Steve Westly. “This is an
opportunity for taxpayers to avoid penalties and prosecution and begin with a
clean slate.”

Taxpayers have until April 15, 2003,
to request to participate in the IRS' Offshore Voluntary Compliance Initiative
as detailed in IRS Revenue Procedure 2003-11. Taxpayers must file federal returns
reporting their correct tax amounts and pay any tax, interest, and penalties owed.
They must also disclose all aspects of their offshore financial arrangements.

The
Franchise Tax Board is now assuring taxpayers that if they cooperate with the
IRS during their participation in the offshore initiative, the state will not
pursue civil fraud penalties or criminal prosecution. However, taxpayers taking
part in the federal program must correct their California tax filings now and
pay the additional tax, penalties, and interest by October 15, 2003, to receive
this treatment.

Interested parties should use the following
address to notify the Franchise Tax Board of their clients' participation or to
correct underreported income tax liabilities and make payments.